SEC May Give Investors Internet Access to Exemptive Applications

To benefit investors, analysts and fund companies, the Securities and Exchange Commission is considering allowing fund companies to submit exemptive applications electronically, rather than in multiple hard copies, with an initial draft notice followed by a notarized application.

Not only would that speed up the SEC’s approval process by making it easier for SEC staff to access files, but it would also give investors online access to the applications.

“This is another step in our commitment to making public filings available electronically for the benefit of investors,” said SEC Chairman Christopher Cox. “This proposal would significantly improve public access to exemptive applications through the Internet, and at the same time will eliminate unnecessary administrative requirements for filers.” Previously, investors interested in viewing exemptive applications could only obtain hard copies through the SEC’s public reference branch or through private services for a fee.

Putting these applications into an electronic repository would also enable mutual funds and their advisors to obtain previous applications to use as models for their own applications.

As the SEC explains in its proposal, The primary goal of the EDGAR system since its inception has been to facilitate the rapid dissemination of financial and business information in connection with filings, including filings by investment companies. The proposed amendments would benefit investors, financial analysts and others by increasing the efficiency of retrieving and disseminating these applications. The mandated electronic transmission of these documents would enable the public to access them more quickly and search them more easily.

Instead of having to come in person or through an agent to the Commission's public reference room to search for a particular submission in paper or microfiche, the public would be able to find and review the application via the Internet by accessing the EDGAR system through the Commission's website or through a third-party website site that links to EDGAR. The proposals would benefit the public by making the SEC’s EDGAR a more comprehensive resource.

A further benefit would be to ensure that all applications are available to the public free of charge on the SEC website without the cost of paying a third party for a copy.

The SEC is currently accepting comments on the proposal through Dec. 14.